Simon Gwynn
Jul 27, 2017

McDonald's CEO: 'We're behaving like a leadership brand'

The restaurant chain has only "scratched the surface" of the potential for delivery, Steve Easterbrook said, following the brand's strong financial results.

McDonald's CEO: 'We're behaving like a leadership brand'

McDonald's revenues for the first six months of 2017 fell 4 percent to $11.7 billion as it continues its refranchising process in the US, but lower costs meant that operating income was up 19 percent to $4.3 billion.

Comparable sales in the second quarter, which take out the impact of factors such as new restaurant openings, were up 6.6 percent globally. In the international lead segment of the business, which covers the largest non-US markets, comparable sales were up 6.6 percent.

The consistent performance of the business was such that it grew both sales and guest count in each of its nine largest markets for the first time since 2008, Easterbrook said in an investor call.

Easterbrook made no attempt to hide his confidence in the brand and its prospects, saying: "We’re fit for purpose with the right structure, right talent and right mindset. We’re behaving like a leadership brand."

Burger on the sofa in your onesie?

Easterbrook used the call to outline what he called the three key accelerators for McDonald’s: digital, delivery, and the roll-out of the "Experience of the Future" restaurant format in the US.

"These new platforms for growth build on our foundation and enhance or accelerate everything we’re doing for our customer," he said. "They bring the most benefit to the most people in the shortest amount of time."

The digital strategy is built on mobile order and pay, which is expected to be available in 20,000 restaurants by the end of 2017, including 14,000 in the U.S.

Delivery is now available in 8,000 restaurants worldwide, Easterbrook said. McDonald's awarded the global account for its delivery service to its roster agency Leo Burnett earlier this month.

The service "illustrates our ambition to redefine convenience for our customers", Easterbrook said. "It also shows how McDonald’s can leverage our size and scale, as nearly 75 percent of the population in our top markets lives within three miles of a McDonald’s."

Delivery was proving to be a spend driver, he added, with the average value of an order typically one-and-a-half to two times higher than in a restaurant.

But, unlike moves such as introducing all-day breakfast in US restaurants, which provided an immediate boost, Easterbrook said, the impact of both mobile order and pay and delivery would be felt more gradually: "It will take time to build awareness, which is the initial step forward to changing customer behaviour."

The brand is today holding a "Global McDelivery Day", in which anyone placing an order for delivery will have the chance to win McDonald’s merchandise including pillowcases, picnic blankets and onesies.

Source:
Campaign UK

Related Articles

Just Published

14 hours ago

How a local male-grooming brand is shifting its ...

X-Men shampoo took prime positioning as an early local F1 partner ahead of the inaugural Vietnam Grand Prix. Then came COVID-19.

15 hours ago

WFH Diary: starting a new job as lockdown began

Twitter's recently appointed APAC head of communications on juggling four time zones, a new role and some furry friends.

15 hours ago

How Shopee plans to make the pandemic windfall a ...

While it benefits from an influx of shoppers and brands, the ecommerce platform works to meet rapidly shifting consumer needs and looks to use personalisation to make sure its customers and buyers stick around after the pandemic.

15 hours ago

We are all lonely, and that’s a good thing

Let's learn to embrace lonliness to usher in better ways to be and behave, says FCB Ulka's AVP of strategic planning.